Fox Sports 1 Said to Debut on TV Systems Without New Fee Accords

Aug. 15 (Bloomberg) -- Twenty-First Century Fox Inc. lined
up DirecTV, Dish Network Corp. and Time Warner Cable Inc. to
carry the new Fox Sports 1 TV network, reaching 90 million
households with a lineup that will include college football and
Major League Baseball.

The channel replaces Fox’s Speed, an auto-racing network,
when it debuts on Aug. 17. DirecTV, Dish and Time Warner Cable
are keeping their existing financial arrangements with Fox,
three people with knowledge of the matter said. They will
continue to pay their current subscriber rate, said the people,
who asked not to be named because terms are private.

The network, in an e-mailed statement today, said every
major pay-TV provider is “on board.”

Fox, which is challenging Walt Disney Co.’s ESPN for sports
audiences, promised investors the new network would reach 90
million households. By allowing the distributors to carry the
channel without long-term fee deals, Fox adds about 46 million
pay-TV households and meets that objective. Lou D’Ermilio, a Fox
spokesman, declined to comment on terms.

Rising Costs

Fox Sports 1 will include sports-centric shows, including a
program hosted by Regis Philbin, and will carry live sports
including college football, college basketball, Major League
Baseball and soccer’s 2018 and 2022 World Cups.

Cable and satellite operators pay about 31 cents a month
per subscriber for Speed, according to research firm SNL Kagan.
Fox Sports 1 will probably earn about 80 cents per subscriber
per month in 2014, Kagan estimates.

DirecTV, Dish and Time Warner Cable are the No. 2, No. 3
and No. 4 pay-TV providers, respectively, trailing Comcast.
Executives at the companies have publicly lamented the rising
cost of sports programming.

DirecTV Chief Executive Officer Mike White said this month
the satellite-TV provider won’t carry the Pac-12 network unless
it agrees to be on a separately priced sports tier or available
a la carte.

“As long as they want to insist that you put more in a
bundle that’s already too big and tax all of the customers at a
rate that we don’t believe is fair for the customers that don’t
care about it, and are unwilling to entertain any discussion of
letting the customers choose, we probably won’t be able to carry
it,” White said.

Time Warner Cable is engaged in a standoff with CBS Corp.,
which broadcasts sports including the National Football League,
over fees to carry its programming in New York, Los Angeles and
Dallas. The cable company, based in New York, began blacking out
CBS in those markets on Aug. 2.